Global Market Size - Healthcare
An estimated $8.141 trillion was spent on healthcare globally in 2018, according to our calculations, which would represent 9.60% of the world's GDP that year. A total of $7.724 trillion was spent on healthcare in 2017 and the figure is expected to rise to $10.059 trillion by 2022. About $6.76 trillion was spent on healthcare services, which accounts for 83% of the healthcare market globally. Below we have presented an overview of our research strategy, our calculations, and some additional findings from our research.
We began our research by exploring organizations such as World Bank, IMF, Knoema to find data points on the global GDP. Also, we consulted reputable authorities for the global spend on healthcare like the WHO and PharmTech, along with healthcare market reports published by research firms such as Grandview Research, IBIS World, and Deloitte. Additionally, we reviewed media sources such as PR Newswire. Using this research strategy, we were able to locate information on the global GDP and healthcare spending, as well as the percent of the world's GDP that is used on this sector (average of five years). We then used the relevant data points and additional information (e.g., the projected value of global healthcare research, spending share of global healthcare services) to triangulate the global spend on the healthcare segment, as of 2018, healthcare services, and healthcare research.
GLOBAL HEALTHCARE SPEND
According to Deloitte, the global healthcare sector consumed $7.724 trillion in spending in 2017 and the projected CAGR from 2017 to 2022 is 5.4%. To calculate the 2018 value, we use a reverse CAGR calculator.
Therefore, the global market size of healthcare in 2018 was approximately $8.141 trillion. Additionally, the market size is expected to expand to $10.059 trillion by 2022.
PERCENTAGE OF THE WORLD'S GDP SPENT ON HEALTHCARE
As reported by Knoema, the global GDP in 2017 and 2018 was $80.7 trillion and $84.8 trillion respectively. To calculate the percentage of the world's GDP that was spent on healthcare, we divide the total healthcare spend in 2018 ($8.141 trillion) by the most recent GDP figure and multiply the result by 100. This calculation goes as follows:
- ($8.141 trillion/$84.8 trillion) * 100 = 9.60%
Hence, 9.60% of the world's GDP in 2018 was allocated toward the healthcare segment.
GLOBAL SPEND ON HEALTHCARE SERVICES (PREVENTIVE, CURATIVE, AND REHABILITATIVE CARE)
Healthcare services comprise around 83% of the healthcare market size globally as of 2018. It serves as the largest division of this particular sector and includes rehabilitative, curative, and preventive care. To determine the dollar amount for healthcare services, we multiply the global spend healthcare in 2018 ($8.141 trillion) by its market share (calculated as 0.83). This calculation resembles the following:
- $8.141 trillion * 0.83 = $6.76 trillion
As demonstrated above, the global market size of healthcare services in 2018 was $6.76 trillion.
GLOBAL SPEND ON HEALTHCARE RESEARCH
By the year 2025, global spending on healthcare research is projected to hit $54.7 billion. Healthcare research is anticipated to grow at a CAGR of 6.6% during the forecast period. To calculate the present value (2018) of healthcare research, we utilize a reverse CAGR calculator.
Therefore, the total global market size of healthcare services in 2018 was about $34.97 billion.
GLOBAL SPEND ON HEALTHCARE TECHNOLOGY
As reported by the HC Innovation Group, the global market size for healthcare technology is expected to improve from $134 billion in 2016 to $280 million in 2021, growing at a CAGR of 16%. To find the present value (2018), we use a reverse CAGR calculator.
Hence, the market size of healthcare technology in 2018 was at least $180 billion.
US HEALTHCARE SPEND
According to Deloitte, spending on health in the United States surpasses $3 trillion annually. Its growth rate is expected to increase through the year 2024. Some significant spending categories in the country include the following:
Hospital Care: $1 trillion
Physicians: $634.9 billion
Prescription Drugs: $328.6 billion
GLOBAL SPEND ON DRUGS
In 2018, the estimated global spend on drugs was around $1.2 trillion. By the year 2023, the market is projected to reach $1.5 trillion, growing at a CAGR of 3% to 6%.